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Yamal–Europe pipeline

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Yamal–Europe pipeline
Location of Yamal–Europe pipeline
Location of Yamal–Europe pipeline
Location
CountryRussia, Belarus, Poland
General directionnorth-southwest
FromBovanenkovo gas field and Novy Urengoy
Passes throughVuktyl, Ukhta, Gryazovets, Torzhok, Smolensk, Minsk, Zambrów, Włocławek, Poznań
ToGórzyca
Runs alongsideNorthern Lights pipeline (partly)
General information
Typenatural gas
PartnersGazprom
PGNiG
Gas-Trading S.A.
OperatorGazprom
Gazprom Transgaz Belaru
EuRoPol Gaz
Construction started1994
Commissioned2006 (fully)
Technical information
Length4,107 km (2,552 mi)
Maximum discharge33 billion m3/a (1.2 trillion cu ft/a)

The Yamal–Europe natural gas pipeline is a 4,107-kilometre-long (2,552 mi) pipeline connecting Russian natural gas fields in the Yamal Peninsula and Western Siberia with Poland and Germany, through Belarus.[1] The Poland portion ceased operating in 2022.

In Gazprom's development project nomenclature the pipeline consists of four sections, Bovanenkovo–Ukhta (1,200 km or 750 mi),[2] Ukhta–Torzhok (970 km or 600 mi),[3] the western section from Torzhok also confusingly named Yamal–Europe (1,660 km or 1,030 mi),[4] and the partly parallel SRTO–Torzhok branch section (2,200 km or 1,400 mi).[5]

History

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Planning for the Yamal–Europe pipeline started in 1992. Intergovernmental treaties between Russia, Belarus and Poland were signed in 1993. In 1994, Wingas started building the Poland section of the pipeline. The first gas was delivered to Germany through the Belarus-Polish corridor in 1997. The Belarus and Polish sections were completed in September 1999.[6]

Construction of the Bovanenkovo–Ukhta section started in December 2008, at about the same time drilling of the first production well in the Bovanenkovo gas field started.[6] The pipeline reached its rated capacity of about 33 billion cubic metres per annum (1.2 trillion cubic feet per annum) of natural gas in 2006, after completion of all compressor stations. The total cost of building the pipeline has been estimated at $36 billion.[1]

Polish gas price reviews

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In 2012, a 10% reduction in the gas price for the Polish state-controlled oil and gas company PGNiG was agreed.[7]

In 2020, the Stockholm Arbitration Tribunal ruled that PGNiG’s long-term contract gas price with Gazprom, linked to an index of oil and gas prices,[7] should be changed to approximate the Western European gas market price, backdated to 1 November 2014 when PGNiG requested a price review under the contract. Gazprom had to refund about $1.5 billion to PGNiG. The 1996 contract is for up to 10.2 billion cubic metres per annum (360 billion cubic feet per annum) of gas until it expires in 2022, with a minimum amount of 8.7 billion cubic metres per annum (310 billion cubic feet per annum).[8][9]

During the 2021 global energy crisis, PGNiG made a further price review request on 28 October 2021. PGNiG stated the recent extraordinary increases in natural gas prices "provides a basis for renegotiating the price terms on which we purchase gas under the Yamal Contract."[10][11]

Polish pipeline section

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In 2019, as part of Poland's plans to become energy independent from Russia, Piotr Wozniak, president of PGNiG, stated "The strategy of the company is just to forget about Eastern suppliers and especially about Gazprom."[12] PGNiG intends to diversify supplies primarily through a switch to liquefied natural gas (LNG) supplies imported from Qatar, the U.S. and Norway, and possibly a pipeline to Norway, greatly reducing the significance of supply through the Yamal pipeline.[9]

Transit on the Polish section of the pipeline onto western Europe was until 18 May 2020 enabled by a long-term transit agreement with Gazprom. Since then, in accord with the EU Capacity Allocation Mechanisms NC regulation 2017/459, transit is offered to all parties on a yearly, quarterly, monthly, daily and intraday basis. In July 2021 Gazprom decided not to book an annual contract, creating concern that Gazprom no longer planned to use the pipeline all year as a route to transport gas to Europe.[13]

The pipeline closed in 2022 and in 2023 Poland took over the 48% Gazprom shares, which were frozen by sanctions, in the pipeline.[14]

Disruptions

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There have been at least seven interruptions, either complete suspensions or restrictions, in gas supply to Poland in the 18 years prior to April 2022. Depending on the type of incident, these interruptions that lasted from a few days to half a year.[15]

On 6 November 2021, Reuters reported that gas delivery through the Polish section had been halted, or the flow has been reversed. According PGNiG, everything is fine from their point of view, as Poland received gas from both the east and the west, according to domestic demand and gas pricing. Russia has been accused of intentionally reducing gas flows to Europe for political purposes, but generally high Russian domestic requirements led to this situation. [citation needed] On 9 November 2021, westward flows into Germany were re-established, and the Kremlin pledged again to increase the delivery of natural gas to Europe.[16][17]

On 26 April 2022, PGNiG's press office informed that "Gazprom has formally applied to PGNiG with a letter on legal changes in the Russian Federation regarding the change in the rules of payment for gas supplies".[18]

The Baltic Pipe between Norway and Poland will have the capacity to replace the roughly 60% of Polish gas imports coming from Russia via the Yamal pipeline, and is expected to be operational by the end of 2022.[needs update][19][needs update] At the end of 2019, the management of PGNiG decided not to extend the Yamal contract that was due to expire at the end of 2022.[15]

On 26 April 2022, Gazprom announced it would stop delivering natural gas to Poland via the Yamal–Europe pipeline, as well as to Bulgaria, as both countries had rejected Russia's demand that payments for gas be made in Russian rubles - a demand allegedly constituting breach of contract.[15][20] Poland said it did not expect disruptions in supply due to its natural gas storage facilities being about 75% full (ensuring 40–180 days of supply), the Poland–Lithuania gas pipeline becoming operational in May that year, the Baltic Pipe natural gas pipeline between Poland and Norway becoming operational in October.[15][20] Poland can also import gas via the Świnoujście LNG terminal. As of 29 September 2022, eastward flow of gas from Germany to Poland through the Yamal–Europe pipeline is stable.[21][22]

Route

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The section west of the Torzhok gas hub includes about 402 kilometres (250 mi) in Russia, 575 kilometres (357 mi) in Belarus and 683 kilometres (424 mi) in Poland.[4] It is fed from the north-east by the Bovanenkovo–Ukhta,[2] Ukhta–Torzhok[3] and SRTO–Torzhok[5] sections, which are all considered to be part of the Yamal–Europe pipeline. The German gas system is connected to the Yamal–Europe pipeline through the JAGAL pipeline.[1] The Bovanenkovo–Ukhta section involved a 72 kilometres (45 mi) undersea pipeline under Baydaratskaya Bay in the southern Kara Sea.[23]

The western section of the pipeline was initially supplied by the slowly depleting gas fields in the Nadym Pur Taz District[24] of the Tyumen Oblast and not from the Yamal project.[25] The SRTO–Torzhok branch section starts at Novy Urengoy, near the developing Urengoyskoye gas field[26] within the Urengoy gas field complex.[5] As of 2020, the Yamal gas fields produce over 20% of Russia's gas, which is expected to increase to 40% by 2030.[24]

Technical features

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The capacity of the pipeline is 33 billion cubic metres (1.2 trillion cubic feet) of natural gas per annum.[27] The diameter of the pipeline is 1,420 millimetres (56 in). The pressure in the pipeline is provided by 14 compressor stations.[4]

Ownership

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The Russian section of the pipeline is owned and operated by Gazprom. The Belarusian section is owned by Gazprom and operated by Gazprom Transgaz Belarus.[27] The Polish section is owned and operated by EuRoPol Gaz S.A., a joint venture of the Polish PGNiG, Russian Gazprom, initially with a 4% holding by Polish Gas-Trading S.A. It was agreed in 2009 that this small holding would be sold, leaving both partners with 50%.[28]

In 2022 the Gazprom shares in EuRoPol Gaz S.A were put under management after sanctions froze the shares and in October 2023 the shares were transferred to Polish oil concern Orlen, which became the 100% owner of the Polish portion of the pipe.[14] Poland sets compensation for the 684-km Polish section of the Yamal pipeline at 787 million zloty ($183m).

Second pipeline

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In 2005, there were plans to build a second leg of the pipeline via Belarus. On 1 November 2007, the Russian minister of industry and energy Viktor Khristenko said these plans had been dropped, because construction of the Nord Stream 1 pipeline was preferred.[27]

See also

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References

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  1. ^ a b c "Yamal – Europe Gas Pipeline". Hydrocarbons Technology. Retrieved 12 November 2021.
  2. ^ a b "Bovanenkovo – Ukhta". Gazprom. Retrieved 3 November 2021.
  3. ^ a b "Ukhta – Torzhok and Ukhta – Torzhok 2". Gazprom. Retrieved 3 November 2021.
  4. ^ a b c "Yamal – Europe". Gazprom. Archived from the original on 6 November 2021. Retrieved 3 November 2021.
  5. ^ a b c "SRTO – Torzhok". Gazprom. Retrieved 3 November 2021.
  6. ^ a b "Gazprom launches Yamal megaproject". Gazprom. 3 December 2008. Archived from the original on 16 January 2009.
  7. ^ a b Harper, Jo (23 May 2020). "Poland's gas company won USD1.5bn compensation claim from Gazprom". Obserwator Finansowy. Warsaw. Retrieved 31 October 2021.
  8. ^ Barteczko, Agnieszka (31 March 2020). "Poland's PGNiG to take immediate steps to receive $1.5 billion from Gazprom". Reuters. Retrieved 29 October 2021.
  9. ^ a b "Victory for PGNiG: the Arbitral Tribunal in Stockholm rules to lower the price of the gas sold by Gazprom to PGNiG". PGNiG (Press release). 20 March 2020. Retrieved 29 October 2021.
  10. ^ "Polish PGNiG asks Gazprom to reduce gas prices under Yamal contract". TASS. Moscow. 28 October 2021. Retrieved 29 October 2021.
  11. ^ "PGNiG files request for price reduction under Yamal Contract". PGNiG (Press release). 28 October 2021. Retrieved 29 October 2021.
  12. ^ Reed, Stanley (26 February 2019). "Burned by Russia, Poland Turns to U.S. for Natural Gas and Energy Security". The New York Times. ISSN 0362-4331. Retrieved 8 March 2019.
  13. ^ Marszałkowski, Mariusz (9 July 2021). "Gazprom decided not to book the Yamal pipe, but it doesn't mean it will abandon it". Biznes Alert. Warsaw. Retrieved 31 October 2021.
  14. ^ a b "Poland transfers Gazprom's stake in gas transmission JV EuRoPol GAZ to Orlen". 11 October 2023.
  15. ^ a b c d Sawicki, Bartłomiej (26 April 2022). "Gazprom zakręcił Polsce kurek z gazem. Premier potwierdza groźby" [Gazprom has turned off the gas tap in Poland. The prime minister confirms the threats]. Rzeczpospolita (in Polish). Retrieved 26 April 2022.
  16. ^ "Russian gas flows via Yamal-Europe pipeline to Germany halted again" Reuters. Retrieved 9 November 2021.
  17. ^ "Wholesale gas prices ease in Europe as Russian gas flows resume" Reuters. Retrieved 9 November 2021.
  18. ^ "PGNiG otrzymało pismo od Gazpromu. Chodzi o zmianę zasad płatności za gaz". Businessinsider (in Polish). 2022-04-01. Retrieved 2022-04-26.
  19. ^ Easton, Adam (26 April 2022). "Russia halts gas supplies to Poland, reports say". BBC News. Warsaw. Retrieved 26 April 2022.
  20. ^ a b "Russian demand for ruble gas payments causes first shutdowns in Poland, Bulgaria". Deutsche Welle. 26 April 2022. Retrieved 26 April 2022.
  21. ^ "Gas flows stable via Yamal pipeline and Ukraine". Reuters. 2022-09-29. Retrieved 2022-10-02.
  22. ^ "Eastward gas flows via Yamal pipeline rise, flows via Ukraine stable". Reuters. 2022-09-27. Retrieved 2022-10-02.
  23. ^ "Gazprom launches construction of Bovanenkovo – Ukhta submerged crossing via Baidarata Bay". Gazprom. 12 August 2008. Archived from the original on 21 November 2008.
  24. ^ a b Yermakov, Vitaly (September 2021). Big Bounce: Russian gas amid market tightness (PDF) (Report). Oxford Institute for Energy Studies. Retrieved 1 November 2021.
  25. ^ "Gazprom starts developing the Yamal gas fields". East Week (150). The Centre for Eastern Studies. 17 December 2008. Archived from the original on 11 July 2011. Retrieved 31 December 2008.
  26. ^ "Urengoyskoye field". Gazprom. Retrieved 12 November 2021.
  27. ^ a b c "Russia drops second leg of gas pipeline via Belarus". RIA Novosti. 1 November 2007. Archived from the original on 17 May 2008. Retrieved 31 December 2008.
  28. ^ Wasilewski, Patryk (28 October 2009). "PGNiG negotiations with Gazprom continues Thursday". Reuters. Retrieved 31 October 2021.
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